But what do you know about practical life with a disabled currency? I do!! Going back to the years 1945-48 before Germany got their new Deutsche Mark.
But uh.. Ali.. correct me if I'm wrong now, but my 'ol school teachers used to talk about how the Nazi's surrendered or something and were occupied by those nasty Russians and upstart American (with a few other allies thrown in for good measure). And I think the majority of their gold reserves were confiscated by the Allies as war reparations.
So it would seem that there wasn't enough gold in those rings and necklaces held by the Germans to make up for the value of a perishable 'ol Lucky Strike... eh?
And btw, didn't the Nazi's ship a lot of their gold to Switzerland?? I seem to remember some fuss about how gold stolen from holocaust victims was shipped there.
Again, no matter whether you currency is backed by gold, silver, or the FF&C of the gov't, if you can't get your hands on that gold because someone all of a sudden decides to declare your currency worthless, you're SOL.
Poor example Ali... care to try again.. double or nothing?
As for the rest of your post, wasn't taking the expansion of money supply out of the hands of the political process the whole purpose of the gold standard??
The problem I see with ANY MONEY is that without the freedom to shift your assets to where they will get the best return or safety, there is little incentive for fiscal restraint by political leaders suddenly cut off from investment capital. That is what is currently happening in Brazil.
They couldn't deal with their 8% budget deficit and extreme national debt, so with so much capital going to non-productive maintenance of the current system, it was natural that money would flood out the country to the US.
If you're losing money in country's currency, shift it to another country with a stronger economy. It's as simple as that and what we're currently seeing happen in the US dollar.
And in my next post, I'll detail an interesting article and my thoughts on a potential scenario.
Regards,
Ron |
